Participants with IRAs Saving More

Investors using both a workplace savings plan and an individual retirement account (IRA) show a combined average balance of $225,600 as of December 31.

According to Fidelity Investments’ analysis of nearly one million investors, this is nearly three times higher than the average Fidelity 401(k) balance of $77,300.  

Fidelity examined the account balances and contributions of those using a workplace 401(k) or 403(b) and an IRA, and found that while the combined average balance for investors in their 20s was $30,200, the numbers steadily increase with age—up to $397,400 for those who are on the verge of or entering retirement (between the ages of 65 and 69).

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The average combined contribution for investors in their 20s was $6,000 and gradually increased over time. The average combined contribution for all investors in the population was $11,150. 

This analysis also examined the savings rate of investors across multiple age ranges and found average combined contribution levels peaked annually at $13,100 for investors in their 50s. This can be attributed to higher income levels and the ability to make catch-up contributions beginning at age 50.  

“While workplace retirement accounts are a great place to save for retirement, we know some will need additional savings to achieve their vision of retirement as they encounter all that life entails,” said James M. MacDonald, president, Workplace Investing, Fidelity Investments. “By maximizing the long-term, tax-advantaged growth potential of both workplace savings plans and IRAs, investors can create a personalized plan to help them achieve better outcomes in retirement.”   

Additional data is here.

Mutual of America Releases Plan Evaluation Guide

Mutual of America has developed 10 questions plan sponsors should consider when evaluating their organization’s retirement plan.

The free publication, “10 Critical Questions to Ask When Evaluating Your Retirement Plan,” was designed to help plan sponsors determine whether their plan provider is adequately supporting their investment, communication and administrative needs—and if it is time to switch providers.

The questions addressed in the guide include:

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  • Are you receiving the service you need?
  • Are you spending more time on retirement plan administration than managing your business?
  • Are you satisfied with the quality of the investments available through your retirement plan?
  • How do the fees you and your employees are paying compare to other providers?

Individuals may request a copy of the 16-page guide by calling 1-866-954-4321.

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